The first chapter investigates the factors that explain the level of technical efficiency of a firm. In an empirical analysis, a unique sample of about 35,000 firms in 256 industries from the German Cost Structure Census over the years 1992-2004 is used. The technical efficiency of the firms is...

When analyzing what determines the efficiency of production, regressing efficiency scores estimated by DEA on explanatory variables has much intuitive appeal. Simar and Wilson (2007) show that this nai͏̈ve two-stage estimation procedure suffers from severe flaws, that render its results, and...